A study on the relationship between audit committee characteristics and risk management disclosure in Malaysian consumer industry / Nur Aininawati Aziz

Failure in risk management faced by giant corporations has captured the headlines for many years, not only in financial industry but in other industries as well such as Enron, WorldCom, Siemens and others. Commonly, these failures occurred when the boards are not fully concentrating on the risks faced by the company. The aim of this study is to investigate the relationship between audit committee characteristics and risk management disclosure in Malaysian consumer industry. Since the nature of consumer industry is associated with many risk such as fraud, security, competition and others, this industry has been chosen to measure their risk management disclosure. This research is based on secondary data obtained from 2016 annual report of 127 of Public Listed Companies (PLCs) in the consumer industry. In this study, the audit committee characteristics such as audit committee independence, audit committee size, the frequency of meeting, audit committee expertise and audit committee tenure have been tested. The results of the study suggest that audit committee size have a positive significant relationship with risk management disclosure whereas other audit committee characteristics were found not to have any influence towards risk management disclosure. This study serves to assist the stakeholders in putting greater emphasis on audit committee in determining risk management disclosure of companies in the consumer industry.